Investors better remember that a rigged market has a lifespan. Once the manipulation and rigging no longer works, the system collapses and fundamentals return. However, you wouldn’t know that today by the charade that continues to take place in the MSM and from official releases via the Federal Reserve.

Today we had another one of those silly “TAPER RUMORS” to occur next month from none other than Atlanta Fed President, Dennis Lockhart.

It was all going according to plan. POMO lifted the S&P 500 instantly 7 points at 1015ET back to unchanged and the mainstream media could discuss the fact that stocks are “off the lows.” Then (admittedly non-voting member) uber-dove Dennis Lockhart hit the wires with some oddly hawkish commentary:

*LOCKHART SAYS TAPERING ‘COULD VERY WELL TAKE PLACE’ NEXT MONTH

*LOCKHART SAYS QE NOT MEANT TO BE ‘PERMANENT FIXTURE’ OF POLICY

Which sent stocks to the lows of the day. We are sure, of course, that these remarks will be walked back by the next Fed speaker but for now, it is clear the market remains entirely headline (and Fed) driven.

Lockhart states the the taper could take place next month. It “could also” take place next decade… so what?. Furthermore, he remarks that QE isn’t a permanent fixture. I would like to remind Fed President Lockhard that the Zimbabwe Dollar was also not a permanent fixture to the Reserve Bank of Zimbabwe… as they are now using other currencies such as the U.S. Dollar after destroying their own currency.

So, after all the FED induced volatility, how did it impact the following at the end of the day:

DOW JONES = -32 points (-0.21%)

SP 500 = -5 points (-0.28%)

GOLD = -$15 (-1.17%)

SILVER = -$0.68 (-3.2%)

Here we can see that the net result was to give the precious metals the enema while the broader markets just yawned off a few measly points. Investors and traders who believe gold or silver’s value is due to supply and demand forces based on manipulated trends orchestrated by the Fed and central banks, go right along with the game play.

These are the same kind of traders that you will see at the local Wall Street bar knocking down kamikaze shooters, bragging how they made a killing shorting the precious metals. I would imagine if you stirred up a debate on the fundamentals of gold and silver, they would laugh out loud and call you an idiot.

This brings me to the market reaction to First Majestic’s Q3 news release. Not only did they beat the street on earnings per share, they are still one of the lowest cost primary silver producers in the world. Their Q3 net income margin to revenue was 21%.

So, how did their stock price get rewarded today:

While it’s true that they sold 500,000 oz more silver-equivalent ounces than they produced (held back from Q2 during the April & June take-down) in Q3, they are still making money even at this manipulated low silver price.

The gold and silver miners in the world are actually PRODUCING WEALTH, whereas the major banks and central banks are STEALING IT. Unfortunately, you can’t get this point across to those have become insane due to the physiological market training by the Fed & member crony banks.

That is why I will becoming out with a MUST READ ARTICLE tomorrow called:

SILVER BEARS: You Have Been Warned

Comments (17)

Seems the taper talk is only a ruse to take down PM’s and allow those who believe a “normalization” of the markets (and the implications around halting or even reversing QE) would have on metals. Of course, funny the Fed and the Treasury seem to have made arrangements to avoid higher interest collapsing the entirely interest rate sensitive economy (so no taper concerns for bonds or stocks). QE’s $2.5 T seems to only be the cherry on top the massive $5 T buying spree “foreigners” have been on since ’08. Of all $10 T in marketable Notes / Bonds / TIPS the Fed owns 25% and “foreigners” 50%…only 25% remains in float…and the Fed is buying all Notes / Bonds well in excess of their issuance.

Seems the Fed is driving to a point where, in collusion w/ “foreign” buyers, there truly is no longer going to be a Treasury “market”…likely within a couple years at present QE and Treasury issuance that all Treasury “market” activity ceases. Oh, the possibilities from there?! But PM’s would be the canary in the coal mine and thus will be heavily “managed” to avoid the appearance of a hyper-monetization under way.

That being said, I send my articles to several websites. I sent many of them today my article, US TREASURY: Ramping Up The Zimbabwe Printing Presses and one let me know that they were going to stop publishing “Hyperinflation & Collapse” articles. I was really taken back.

However, after a bit of thought it makes perfect sense as I know their Demographic. But, it will be unfortunate for them in the end as they are not allowing an OPEN DEBATE.

Upton Sinclair’s quote sums it up so nicely – “it is difficult to get a man to understand something, when his salary (or retirement or worldview or energy outlook) depend upon his not understanding it”

This data you present has become akin to attacking someone’s religion and asserting that there’s a strong possibility the world one has built around a deity is in fact a farce…paradigm killer…and thus this info will not be accepted…it will be called heresy and of the lunatic fringe simply because if it is true it would require action…potentially life altering action…societal change and now. So important to avoid the pain and problems associated with cognitive dissonance.

Without inventory buildup, 3rd qtr. gdp would have been .6% instead of 2.8%. Sept ytd, inventory buildup has amounted to $185 billion, a big chunk of gdp. It would not be surprising to see inventory change to turn negative next qtr. That would make a nice headline – Federal tapers while gdp flips negative. That would be a big confidence builder. Also, looks to me that construction data indicates weakness. R&D and business equipment spending was negative and service spending which makes up 44% of gdp was up .1%.in most recent qtr.

The Fed is covering for the ineptitude of Congress. QE does not solve structural problems. Healthcare costs need to be axed in half to be competitive with Europe. Entitlement and the tax code are in urgent need of reform.

If the western central banks had a lot of gold to dump on the market, think we would have seen it in last week. Despite the price drop, the Chinese have not aggressively stepped up their buying. Imo, they’re luring western central banks into giving away their gold.

I like rigged pm markets. Sure it’s caused me some short term pain – I’m averaging in – down about 3% for year. But consider the fundamentals.

While I agree that all markets are manipulated, I do have a problem with the silver market specifically. This manipulation, this price suppression often written about has one very significant flaw. Silver is a worldwide market, priced at the comex, but worldwide just the same. Silver is sold 24 hours a day around the world. China, Japan, Europe, Russia, Canada, Mexico, Australia, United States, India all have vibrant silver markets where people can walk into shops, lay down fiat money and walk out the door with physical silver. IF this price suppression plan is designed to make silver the most undervalued asset in the world then WHY is it so readily available for purchase at my local coin store at less than 10% premium for a generic single silver one ounce round? If silver truly is the deal of the century than how come no one is buying?

I hope you know I am writing due to my own frustration, but is the entire planet content to NOT buy silver in any form at prices close to or below production cost? I’ve thought this is a no brainer, but clearly I have been wrong.

Dollar strength, inflation, debt, who cares. It’s such a tiny market and yet it seems that millions of ounces sit on store shelves around the world gathering dust.

Seriously, at these prices why is there not greater demand for physical silver?

As I hit send, silver is down again. There are billions of people on this earth and millions of ounces of silver available for investment. One would think at this price silver would be tough to find, but it’s not. I can buy all I want tomorrow for less than what I paid today!

The problem with gold and silver compared to most other goods-things, is that when the prices of the precious metals go down (on average) people stop buying. However, when the prices of TV’s, cars, boats, food, clothes etc and etc go down, its a sale and people come in and buy more.

Furthermore, the silver market is rigged through the currency, Treasury, Bond, Derivative and paper markets. Psychology rules the world and financial markets. Market Sentiment and precious metal psychology has been flushed down the toilet… and this has been done by a clever campaign by the Fed and member banks.

The US Mint update their sales numbers for the year 2013 a new record was reached 40.175.000 ASE . The strange thing is the last to updates was exactly 500000 oz each so November sales are 1000000 now . As long as I watch the numbers on us mint, there never have to round equal numbers in there updates in a row. This looks very manipulated to me , the Mint don’t want to show there strong sales to the public.

Hi Steve I listened to an interview with Peter schiff and Dennis gartman.. I’ve read some articles by gartman over the years and came to the conclusion he’s just another establishment twit but he thinks that the U.S. imports will be in positive territory in couple years because of the shale and gas revolution in this country.. Plus the dollar will be the world reserve currency for 300 more years.. Some of the things this guy was saying was just ludicrous!! I don’t agree with everything schiff always says but at least he lives in reality

The US mint will keep its silver ‘rationing’ allotment process, in place for the foreseeable future.

There are no markets any longer, just interventions.

True price discovery has disapeared, along with honest bid/ask quotes.

Physical silver is the true “achilles heel” of the paper precious metals market. Since the dawn of mankind, over 90% of all gold mined is still with us. For silver its the exact opposite. Conservatively spaeaking, 80% of all silver ever mined is GONE! Thats right – GONE.

Where? You ask. At the bottom of landfill sites mostly. Silvers artificially low price over the years, has made it uneconomicaly viable to reclaim it. Countries and some central banks in the past, kept large stock piles of physical silver. These stock piles have all been sold into global market and have been ‘used’ over the years.

Now the global physical silver supply is a “hand-to-mouth” situation. Like most now who live pay check-to-pay check. Evidence stands in stark relief of this. Case in point; The Sprott silver fund, had to wait an extrodinate amount of time for delivery. When the good for delivery silver bullion bars were finally delivered, they were all stamped with very recent miners/refiners mint markings. In other words, the silver suppliers had to wait until the silver miners could mine the silver!

The global physical silver supply remains very tight and will remain so at this low of a price. Much higher prices will be required to ‘lure’ physical silver out of hiding and out of the strong hands who hold it. (JMHO)

I think as QE continues there will be a shortage of quality collateral so you will see more gold leasing from bullion banks even though bullion is being drained from GLD and Comex to go to Asia.

There is a mathematical symmetry when GOFO rates rise for a while then gold gets smashed as dollar liquidity gets tight or the jump in repo fails precedes the smashes in gold prices. Note March 13 and June 12 and July 17. Gold acts as a stand-in collateral when treasury shortages are most acute.

Gold falls when called on by the banking system to fill in thre growing repo and collateral cracks. So, what is bullish long term (monetary mayhem and financial stress) with massive money creation is SHORT-TERM (1 to 18 months) bearish.

“I think as QE continues there will be a shortage of quality collateral so you will see more gold leasing from bullion banks even though bullion is being drained from GLD and Comex to go to Asia.”

Don’t think the bullion banks have much gold. Where are they going to get it from? I would think the western central banks want to hold on to their remaining gold and not give it away to china, thailand, indonesia, vietnam etc. You sound like the supply of gold available to the bullion bankers is plentiful.
Please explain.

I am not an expert in the repo market, but the jist is that as QE (money creation) continues, the system becomes more unstable and banks are reaching for good collateral such as gold. I think that more and more gold is being leased by Bullion banks. Reports say the average outstanding paper claims to one ounce of gold are 93 to 1. I do not know how long this will continue, but draining of physical gold from West to East and longer duration of negative GOFO rates mean a resolution will come.

Google: Thunder Road Report: Collateral: could be the post-Lehman reflation be reaching its limits?

While it’s true that they sold 500,000 oz more silver-equivalent ounces than they produced (held back from Q2 during the April & June take-down) in Q3, they are still making money even at this manipulated low silver price.

This is just the kind of company management decision that makes me think these guys just do not recognize what is in the best interests of their shareholders. First they do the right thing, hold production from the market due to the price being unreasonably low, then they dump it on the market with the price still unreasonably low a quarter or two later. Sure they have to sell enough to keep the lights on and pay their people. Yes, the end of year is coming up and being profitable should help increase the share price (that hasn’t exactly worked though, has it?). Worse, those ounces are hypothecated 100 times to become 50 million. And that’s just one company.

Money companies, which is what gold and silver miners are, need a better system. A system that does not feed the opposition. To do that the shares need to get off the Western exchanges so they are not naked shorted and the bid/ask stack isn’t viewable by the corrupt brokerages. Then the profits (dividends) need to be attached to the shares. The price of the share can then represent the underlying value of the company plus the daily value of the attached micrograms of gold and silver. Computers are perfect for handling this kind of thing. Vault storage fees for the metals become a company expense.

But profits are the minority of the metal being produced. Starving the hypothefication beast of the rest of the money the mine produces needs to be done too. And that’s where advertising comes in.

Today, savers are not getting a return in bonds (by design courtesy of the central banks). Stocks, riskier than bonds, also are not a place for savers. They are a place for investors. And even cash (the folding paper kind) isn’t a place for savers due to the central banks dilution policy. So miners need to sell their product to savers, and sell it as being savings. Make it possible to get the savings out in kind. Just get metals destination away from the bullion banks and industry. Industry can still get metal from the majors who mine money as a side product. The bullion banks can go whistle.

Sure, there are other details to iron out. And it is better and worse than holding metal yourself. But disrupting the current system is a must.